HAC Healthcare Accounting Financial Reporting & Analysis 5

Question 1

The Disproportionate Share Hospital (DSH) adjustment in Medicare compensates hospitals primarily for:

Accepted Answer

Serving a large proportion of low-income and Medicaid patients

Answer

DSH payments compensate hospitals that serve a disproportionately large share of low-income patients, particularly those covered by Medicaid and uninsured individuals.

Question 2

Which accounting principle requires healthcare organizations to record expenses in the same period as the revenues they helped generate?

Accepted Answer

Matching principle

Answer

The matching principle requires that expenses be recognized in the same accounting period as the revenues they helped produce, ensuring proper period income measurement.

Question 3

A hospital reports total assets of $200M and total liabilities of $120M. Its equity multiplier is approximately:

Accepted Answer

2.5

Answer

Equity multiplier = Total assets / Total equity; equity = $200M - $120M = $80M; $200M / $80M = 2.5, indicating the hospital uses $2.50 in assets per $1 of equity.

Question 4

In healthcare financial analysis, 'adjusted discharges' are used to:

Accepted Answer

Normalize inpatient volume to account for outpatient activity

Answer

Adjusted discharges convert outpatient visits into inpatient equivalents so that per-unit cost and revenue metrics reflect total patient volume including both inpatient and outpatient services.

Question 5

Under ASC 842, a hospital that enters a 10-year operating lease for medical imaging equipment must:

Accepted Answer

Record a right-of-use asset and a lease liability on the balance sheet

Answer

ASC 842 requires lessees to recognize a right-of-use asset and corresponding lease liability for all leases with terms greater than 12 months, bringing operating leases onto the balance sheet.

(HAC) Healthcare Accounting Certification Practice Test

(HAC) Healthcare Accounting Certification Practice Test

HAC Healthcare Accounting Financial Reporting & Analysis 5